Omnichannel is the KING

Online retail is experiencing by far the best times in history. In the last couple of years retail sales through digital channels (including mobile sales) have been rising by more than 20% annually. Not surprisingly, much of these gains have gone to online retailers, with Amazon being the biggest beneficiary (now accounting for 26% of overall online retail sales in US).

In the last couple of years retail sales through digital channels have been rising by more than 20 per cent annually.

As Amazon continues to expand aggressively into new categories like grocery, fashion and brick-and-mortar (not to mention other e-commerce giants, for example, Chinese Alibaba), it poses existential threat to traditional retailers. However, this time I would like to put focus elsewhere.

Given such harsh conditions, traditional retailers have bet their futures on omnichannel retailing. The omnichannel strategy hinges on the idea that providing a seamless shopping experience in brick-and-mortar stores and through a variety of digital channels not only differentiates retailers from their peers, but also gives them a competitive advantage over online-only retailers by leveraging their store assets.

But the KEY question still remains – are omnichannel shoppers more valuable to retailers? In order to answer this, a recent study investigating shopping behavior of nearly 50,000 customers was conducted. Let us take a look at the main takeaways.

Stats. Of the study participants, only 7% were online-only shoppers and 20% were store-only shoppers. The remaining majority, or 73% respectively, used multiple channels during their shopping journey.

More than 3/4 of studied shoppers used multiple channels during their shopping journey.

According to the study, the more channels customers use, the more valuable they are:

• Omnichannel customers spent an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers.
• Also, with every additional channel they used, the shoppers spent more money in the store. For instance, customers who used 4+ channels spent 9% more in the store, on average, when compared to those who used just one channel.
• Surprisingly, conducting prior online research on the retailer’s own site or sites of other retailers led to 13% greater in-store spending among omnichannel shoppers. This finding goes against the grain of the conventional wisdom that spur-of-the-moment, impulsive shopping bulks up the topline of traditional retailers. Instead, study findings imply that thoughtful searching beforehand led customers to greater in-store purchases.
• In addition to having bigger shopping baskets, omnichannel shoppers were also more loyal. Within six months after an omnichannel shopping experience, these customers had logged 23% more repeat shopping trips to the retailer’s stores and were more likely to recommend the brand to family and friends than those who used a single channel.

All in all, it is clear that in today’s world omnichannel experience is inevitable. It drives the engagement of core shoppers with the retail brand and ultimately draws them to the physical store. In turn, this means more sales and more revenue. Traditional retailers with physical stores will do much better not only by leveraging the power of the online world, but by synchronizing the physical and the digital worlds to provide shoppers with a seamless, multi-channel experience that online pure plays simply cannot match.

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